Home loan activity strong amongst buoyant property market
Home loan activity is at historically high levels, according to the latest data from the Australian Bureau of Statistics.
Australians committed to $31.4 billion of home loans in November, which was 6.3% higher than the previous month and 33.2% higher than the previous year.
Owner-occupier borrowing was up 7.6% on the month and 17.2% on the year, while investor borrowing was up 3.8% on the month and 86.9% on the year.
Want to enter the market this year? Here are three home loan tips:
- Maximise your credit score – ensure all loans and bills are paid on time
- Reduce your credit card limit
- Get started early – it can take several weeks to get a home loan pre-approval
- Speak to a broker – brokers can compare loans and access special deals on your behalf
Compare interest rate and save.
How to escape the increasingly expensive rental market
With rents climbing steeply in many parts of the country, 2022 might be the ideal time for younger Australians to enter the market.
The average rent paid by a tenant living in a capital city was 7.4% higher in the December quarter of 2021 than the same quarter of 2020, according to Domain.
So if you’re a first home buyer, you might be wondering, “What can I do to increase my deposit and enter the property market sooner?” Here are a few ideas:
- Increase your income – ask for a raise, seek a higher paying role, offer to additional shifts, start a second job, start a side hustle
- Reduce your expenses – move back in with parents, move to a cheaper rental property, cut back on discretionary expenses, become a minimalist and sell what you have been hoarding
- Take advantage of Federal and State Government support such as – opt for a low-deposit loan, a family guarantee loan or a spot in the First Home Loan Deposit Scheme; New Home Guarantee; Family Home Guarantee
- Take advantage your state Government’s First Home Buyer’s grants and stamp duty concessions.
Please don’t hesitate to reach out if you would like to further discuss the options for First Home Buyers.
Hordes of Aussies building their dream home
There’s a house building boom going on right now, partly because of the now-concluded HomeBuilder incentive and partly because interest rates are so low.
Building work started on a record 149,345 new detached houses in the year to September 2021, according to the latest data from the Australian Bureau of Statistics.
If you’re planning to build a new home, please note that financing residential construction projects is more complicated than getting a standard home loan.
Lenders require additional paperwork – all the usual documents plus a copy of your building contract, building plans, permits and building specifications, as well as quotes for any additional work you might be planning.
The way lenders extend a construction loan is also more complicated: instead of advancing the loan upfront, they release the funds directly to the builder ,inline with the construction milestones documented in the building contract.
If you are looking to build a new home in 2022, Let’s Chat your options.
Property prices growing at varying rates across the country
Australia’s property market enjoyed extraordinary growth during 2021, but a city-by-city breakdown shows that different markets are at different stages of their cycle.
Looking at a basket of all Australian homes, the median price increased 22.1% last year, according to CoreLogic. Here’s a look at each capital city:
- Sydney’s monthly growth rate peaked at 3.7% in March and was 0.3% in December
- Melbourne peaked at 2.4% in March and fell 0.1% in December
- Perth peaked at 2.7% in February and rose 0.4% in December
- Hobart peaked at 3.3% in March and rose 1.0% in December
- Canberra peaked at 2.8% in March and rose 0.9% in December
- Darwin peaked at 2.7% in April and rose 0.6% in December
Brisbane (2.9% growth in December) and Adelaide (2.6% in December) are the exceptions to the rule, with both cities enjoying their strongest growth at the end of last year.
So the data suggests that two of Australia’s capital cities are in strong growth mode, while the others are experiencing milder growth.
Kind Regards, Sal
Sal Cinque | CEO
03 9886 0800 | loans@tagfinancial.com.au
Disclaimer: The information contained on this page is general in nature. Professional advice should be sought before acting on any aspect on this page. TAG Finance and Loans Pty Ltd ABN 25 609 906 863 Credit Representative Number 483873 National Mortgage Brokers Pty Ltd ABN 88 093 874 376 Australian Credit License 391209.